Spud FD Roasted Over £8.7m Potato Scam
A potato company finance director faces jail after a Sainsbury’s manager was ‘showered with excessive gifts’ that left the supermarket being overcharged by £8.7m.
Andrew Behagg, FD of Greenvale, handed thousands of pounds in brown envelopes to Sainsbury’s potato buyer John Maylam as well as providing him with stays at Claridges and a luxury 12 day excursion to the Monaco Grand Prix in 2007, Croydon Crown Court heard.
Greenvale supplied approximately 45% of Sainsbury's potatoes in 2008 at a cost of around £40m, but over charged the supermarket and spent the extra money on lavish lifestyles.
Behagg was convicted of one count of corruption for his part in the fraudulent scheme by Judge Nicholas Ainley yesterday.
After the Court decision was announced, Sue Patten, head of the Crown Prosecution Service central fraud group said: ‘This was corruption on a massive scale. The prosecution's case was that as a result of this corruption, Greenvale was able to keep lucrative business for the supply of potatoes to Sainsbury's, valued at £40m per year, at the same time as overcharging them.’
She added: ‘In return for these criminal payments, Greenvale employees David Baxter and Andrew Behagg were able to collude with Maylam in overcharging Sainsbury to the tune of £8.7m.’
‘Today's message is clear: there is no place for corruption in British business. It attacks fair competitive practices and undermines our international reputation. This case demonstrates a clear distinction between reasonable business hospitality and that which is criminally corrupt.’
The owners of Greenvale AP, Produce Investments, hired firm Baker Tilly to assist in getting to the bottom of the scam, after an employee became suspicious when asked to withdraw £5,000 in £50 bank notes on the fraudulent trio’s behalf.
In a statement Produce Investments said: ‘We instigated this investigation and have since then introduced new procedures to make sure that such abuse can never happen again.
‘Our investigations showed that £3.2m - rather than the figure mentioned in court - had been disbursed improperly and all such arrangements were stopped immediately.’
Maylam and Baxter had, prior to yesterday’s court proceedings, already pleaded guilty to money laundering and corruption and all three are to be sentenced at Croydon Crown Court on 22 June 2012.